With so much talk of economic gloom, it's easy to overlook one of the fundamentals of life. At any given point in the economic cycle, different businesses tend to be experiencing wildly differing trajectories. In tougher times, the differences in direction of travel may be even more stark.
In a downturn quality businesses can pick up market share faster than in the good times. Customers become more discerning about where they spend their money. They want, above all else, value and reward businesses that maintain or improve their standards by actively seeking them out. Other businesses suffer.
No surprise perhaps then that well-invested hospitality sector businesses did especially well over the festive period. Quality operators I have spoken to in the past week are certainly enjoying the warm after-glow of a very, very strong December trading period. The month should be a period of gorging for good pub, bar, restaurant and hotel operators. The takings in the festive period ought to build enough fat to sustain good businesses through the leaner months of January and February.
Helping, too, last month was the mildest weather in recent memory, a stark contrast to the four-week cold spell that blighted the run-up to Christmas last year.
Revolution vodka bar operator Inventive Leisure saw like-for-like sales up around 17% in like-for-like terms during December. Founder Roy Ellis claims it was the best trading result he's ever had over the month. "We've been trading for 21 years and know that once every seven years everything falls perfectly, " he told me. "Last year the weather was very unhelpful. This year the weather couldn't have been more helpful."
Likewise, fellow high street operator, Intertain, operator of the Walkabout chain, found trading beat expectations, with "high single digit" growth. Chief executive John Leslie tells me: "If you'd have offered me the final outcome at the start of December I'd have taken it." Interestingly, though, there appeared to be a north-south divide on New Year's Eve with, for once, the south suffering rather than the north. "I think people in the south have got fed up with spending £100 on a taxi. Certainly my own children opt to go to friends' houses now on New Year's Eve."
Food-led operators also had a strong month. The five-strong pub operator Innventure reported gross sales of £482,000 for the three weeks over Christmas and New Year compared to £421,000 last year, with like-for-likes up 14.5%. Boss Chris Gerard tells me: "People will certainly come out to the pub for quality and it was a very good Christmas – customers were definitely keen to enjoy themselves. But it also didn't feel like one last hurrah – there was a mood of quiet confidence."
Major quoted operators will provide their own indications of how the crucial December trading period went in the coming days and weeks. The best of them had a very solid 2011 anyway, but expect a particularly sharp boost to like-for-likes for December as more results emerge. London-based Novus Leisure, for example, kicked off the mini December reporting season this morning with an impressive 18% jump in like-for-likes.
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